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Inner conflict between nuclear power generation and electricity rates: A Japanese case study

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  • Ida, Takanori
  • Takemura, Kosuke
  • Sato, Masayuki

Abstract

Since the March 11 earthquake, Japanese households have been facing a trade-off problem between decreasing dependency on nuclear power generation and avoiding an increase in electricity rates. We analyze this inner conflict quantitatively, adopting two economic–psychological approaches: First, we note that the trade-off causes cognitive dissonance after making a choice that results in a wider desirability gap between the chosen and rejected alternatives. Second, the consumer surplus improves by 11.2% with a no-choice option for suspending judgment in the presence of cognitive dissonance. Third, individual characteristics such as gender and annual household income are significantly correlated with both cognitive dissonance and a preference for the no-choice option.

Suggested Citation

  • Ida, Takanori & Takemura, Kosuke & Sato, Masayuki, 2015. "Inner conflict between nuclear power generation and electricity rates: A Japanese case study," Energy Economics, Elsevier, vol. 48(C), pages 61-69.
    • Handle: RePEc:eee:eneeco:v:48:y:2015:i:c:p:61-69
    DOI: 10.1016/j.eneco.2014.11.019
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    Cited by:

    1. Tatsuhito Kono & Masaya Okuno & Kazuho Yamaura, 2022. "Regional differences in cognitive dissonance in evacuation behavior at the time of the 2011 Japan earthquake and tsunami," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 111(1), pages 139-162, March.
    2. Okubo, Toshihiro & Narita, Daiju & Rehdanz, Katrin & Schröder, Carsten, 2020. "Preferences for Nuclear Power in Post-Fukushima Japan: Evidence from a Large Nationwide Household Survey," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 13(11).
    3. Kayo MURAKAMI & Takanori IDA, 2019. "Deregulation and status quo bias: Evidence from stated and revealed switching behaviors in the electricity market in Japan," Discussion papers e-19-001, Graduate School of Economics , Kyoto University.
    4. Gutsche, Gunnar & Nakai, Miwa & Arimura, Toshi H., 2021. "Revisiting the determinants of individual sustainable investment—The case of Japan," Journal of Behavioral and Experimental Finance, Elsevier, vol. 30(C).
    5. Rehdanz, Katrin & Schröder, Carsten & Narita, Daiju & Okubo, Toshihiro, 2017. "Public preferences for alternative electricity mixes in post-Fukushima Japan," Energy Economics, Elsevier, vol. 65(C), pages 262-270.
    6. Gunnar Gutsche & Miwa Nakai & Toshi H. Arimura, 2021. "Individual Sustainable Investment in Japan," RIEEM Discussion Paper Series 2006, Research Institute for Environmental Economics and Management, Waseda University.

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    More about this item

    Keywords

    Nuclear power; Cognitive dissonance; No-choice option; Discrete-choice experiment; Random parameter logit model;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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